ABC, Inc. purchases a fixed asset for $120,000, which has a salvage value of $20,000. It has a useful life of 5 years. The machine is will be used for a total of 10,000 hours (3,000 hours in year 1, 2,500 hours in year 2, 2,000 hours in year 3, 1,500 hours in year 4, and 1,000 hours in year 5). The asset will actually be sold after 5 years for $25,000.

Calculate the annual depreciation expense for a straight-line approach

Calculate the depreciation each year doing a units of production approach

Show a chart (similar to our power point) for a double-declining balance approach

Construct t the "T" accounts for initial purchase, first year straight-line depreciation, and final sale/disposal of machine